THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

KYRA PHILLIPS, CNN ANCHOR: Want to take you straight to the White House briefing. Scott McClellan is taking Q&A from reporters. As you know, we've been following this story over the past week-and-a- half or so about these ex-generals coming forward and asking the president to push for the resignation of Sec. Def. Donald Rumsfeld. You can see on the bottom part of the screen there we're waiting live for the Pentagon briefing as well. Meanwhile, we want to take you back to Scott McClellan and listen in to what's happening there at the White House.

SCOTT MCCLELLAN, WHITE HOUSE PRESS SECRETARY: I encourage you not to read more into it than what it is. These are the two announcements that were made today. The president throughout his administration has looked to the most experienced people he can find to fill key positions.

The president believes in putting the best people in the positions, in his administration. He has had a great team that has worked very closely with him to advance a positive agenda for the American people. And we want to continue to build upon our record of accomplishment.

QUESTION: You talked yesterday about the revitalization and reenergizing the administration. Is this part of that effort?

MCCLELLAN: Sure. Well, is this part of that effort? Today's announcement? Well, when you have a new chief of staff coming on, the chief of staff, as I talked about yesterday in the senior staff meeting, talked about this as a time to refresh ourselves and reenergize the team.

And so the president has given him the authority to do what he needs to do when it comes to looking at the White House structure and looking at personnel and looking at all our cabinet departments and so forth.

QUESTION: Should we think that he's just going to look within a pretty tight circle for ...

MCCLELLAN: No, I think you're making that comment. I'm not suggesting that at all. We'll keep you posted as we move forward. But I don't have anything else to announce today, if that's what you're getting at. Go ahead.

QUESTION: The president talked a little bit about gas price this morning. I think Exxon had profits of $36 billion last year. The president talked about price gouging. Does he think that the oil companies have engaged in price gouging? And are you looking at that?

MCCLELLAN: Well, what he said was that the government has a responsibility to make sure that we are watching carefully and that we investigate any possible price gouging that could be going on.

I think after the hurricanes last year, there was concern that maybe there was some price gouging, and the Department of Energy worked with states and I think there were a few bad actors ...

PHILLIPS: We'll continue to follow that briefing there with Scott McClellan, wait to see if he does make any mention of the fact that those generals are calling for the resignation -- or putting pressure, rather, on the president to ask Donald Rumsfeld, the defense secretary, to resign. We'll follow that.

But meanwhile, we have got some developing news now about those athletes accused and arrested -- we're talking about the two university -- Duke University lacrosse players take to jail, fingerprinted and photographed hours just after being named in sealed indictments in a rape case. The whole nation is watching, and their arrests may not be the end of it.

Let's get straight to Jason Carroll who, I'm being told, is about to bring us some new developments, constantly breaking news on this story. Jason, what do you know?

JASON CARROLL, CNN CORRESPONDENT: Absolutely, Kyra.

Well, we're now getting a sense of exactly how the defense's case is going to be shaping up. Two sources close to the investigation tell me that both of the young men who have been indicted, that the defense in terms of what they have in terms of evidence, that the defense now will present, at some point, evidence that both of these young men were not there during the time that this alleged assault took place.

And in terms of the evidence that they have, they said that they have bank records, evidence from an ATM. They also say that at one point, a cab driver drove one of these young men during the alleged time that this assault took place. They also say one of these young men may have been at a restaurant during the time of the alleged assault. They also say that they might be able to, at some point, provide evidence of a credit card receipt to prove that.

So, what is going to really happen in this particular case is that timeline is going to be key in terms of the defense and how they present their case. Once again, they are going to show, in terms of the timeline here, that these two men that had been indicted, Collin Finnerty and Reade Seligmann, were not there during the time of the alleged assault.

Also today, Kyra, I had an opportunity to speak with one of the players on the team. He tells me that he has spoken to both Collin and Reade. He supports everything that the defense is claiming at this point and he says that they are outraged that this has taken place. So, a lot of developments here, but just want to make clear that the defense, at this point, it seems what they're doing is developing their case, and we're getting a real sense of what they're going to be showing and that has to do with the fact that they say both of these young men were not there during the time of the alleged assault, and they say they're going to be able to provide documents to prove that -- Kyra.

PHILLIPS: All right, Jason, now here's what's interesting. Let's kind of backtrack a little bit because you were the first to start working on this story in breaking news when it first came out. Those DNA tests that were taken were of the players that were in that house at the time. But the D.A. even came forward and said there are other tests, possible -- we were trying to read between the lines -- that may be pending.

So people thought, well, there were other people at this party, or they could be testing individuals, say these players, who were not at the party because, as you remember, there was talk that possibly this exotic dancer came to this party already with bumps and bruises and something could have happened prior to this party, right? Am I sort of piecing together what we remember from the very beginning?

CARROLL: I think you are. I think a lot of people thought with those DNA test results that would sort of end this whole thing. Obviously it has not. You know, the defense attorneys that we spoke to believed all along that the DNA test results would come back as they did, showing no match between any of the 46 players who were tested and this young woman, who claims that she was raped by three of them.

Another point to point out is that, in terms of these DNA tests, they tested all of those that showed up at the party. Doesn't mean that they were there during the entire period of time. Some of them may have come to the party and then left.

Which brings me to another point, which has to do with another development that possibly you heard about over the weekend, was that there were complaints from defense attorneys that investigators showed up at Duke University asking questions, trying to ask some of these lacrosse players questions. We got a little bit more information about that as well. We hearing from defense attorneys that investigators were all of the way up through this weekend trying to find out who was at the party when, meaning who stayed the whole time, who was there just part of the time. These are points that investigators were still trying to nail down all of the way throughout this weekend, even just a day before these indictments were handed up by a grand jury.

PHILLIPS: So, and then two other questions for you. One about the fact that she might have shown up to this party, the alleged rape victim, with bumps, bruises, scratches. Is it possible that something could have happened and all of this could be centered around something that took place before that party started in that house? Or do investigators believe something happened in that home? CARROLL: Investigators definitely believe something happened in that home. That is what prosecutors say, and they're going to be also presenting evidence obviously from what took place at the hospital shortly after this alleged attack took place. They're going to be using her testimony. It is their belief, investigators, prosecutors, that something took place inside that home, not before, but inside that home.

PHILLIPS: So we're talking about $400,000 in bail. We know -- have both of those young athletes been released on bail,or only one, and do we know who paid the money? Was it a parent that paid that $400,000 bail?

CARROLL: We do know that both at this point have posted bond. Unclear in terms of how they were able to raise the money to do that.

We also want to let you know that in terms of what will happen later today, their defense attorneys, as well as some of the other defense attorneys that were involved in this, as you know there are many, are going to be meeting later on today to develop a strategy, also come up with a gameplan in terms of how to release some of the information that we just released to you about some of the documents which seem to support the claim that these two young men may not have been there during the time that this alleged assault took place.

PHILLIPS: Our Jason Carroll with developing details there on the Duke investigation. Jason, thank you so much.

At any moment now, we're expecting Defense Secretary Donald Rumsfeld will hold one of his regular Pentagon briefings amid some highly irregular and public dissent from some former comrades in arms. After the briefing, Rumsfeld sits down with military analysts for a brainstorming session, or damage control, or both. We can't take our cameras inside, but we will bring that you story later on LIVE FROM.

Rumsfeld's boss is still his chief defender at the White House this morning. President Bush didn't hold back when CNN's Ed Henry asked about staff changes.

(BEGIN VIDEO CLIP)

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Mr. President, you've made it a practice of not commenting on potential personnel moves...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Of course I do.

HENRY: ... calling it speculation.

HENRY: ... you can understand why, because we've got people's reputations at stake. And on Friday, I stood up and said I don't appreciate the speculation about Don Rumsfeld. He's doing a fine job. I strongly support him.

(END VIDEO CLIP)

PHILLIPS: And it may be a political war for Rumsfeld, but it's still a very real war for U.S. troops in Iraq.

Here's CNN's Pentagon correspondent Barbara Starr.

(BEGIN VIDEOTAPE)

BARBARA STARR, CNN CORRESPONDENT, (voice over): In Iraq, a five month decline in U.S. casualties is over. Forty-eight American troops killed in the first two weeks of April, compared to 31 for the entire month of March. In Baghdad, a seven-hour firefight took place after 50 insurgents attacked a checkpoint. U.S. forces rushed to respond. In Ramadi, multiple attacks on U.S. and Iraqi positions.

The reality on the ground for U.S. troops is they are still fighting for their lives as the political firestorm rages. All of this fueling disenchantment over the war and those who run it. Particularly Defense Secretary Donald Rumsfeld. The generals who fought in Iraq and think Rumsfeld should go are not backing down.

MAJOR GENERAL JOHN BATISTE, U.S. ARMY (RET.): It's a matter of accountability and competency.

STARR: Rumsfeld's political operatives continue to organize supporters. A "Wall Street Journal" op-ed written by four long- retired generals use his talking points provided by the Pentagon, including the number of meetings Rumsfeld had with his commanders. Even retired generals who say it's not their business to call for Rumsfeld's recognition, say mistakes have been made and are calling now for more troops.

BRIG. GEN. JAMES MARKS, U.S. ARMY (RET.): You can't prosecute a global war on terrorism as aggressively and as thoroughly and as broadly as the United States is doing right now and correctly with the numbers that you have in uniform.

STARR: The former chairman of the Joint Chiefs of Staff says the problems in Iraq may be emboldening the critics.

GEN. RICHARD MYERS, FORMER JOINT CHIEFS CHAIRMAN (RET.): Political progress in Iraq is not going as well as we had hoped and planned and maybe there's frustration over that as well.

STARR (on camera): The Bush administration hopes political progress in Iraq, a new national unity government and a new prime minister will ultimately quiet political critics here in the United States.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

PHILLIPS: Let's get straight to the Pentagon briefing now with Secretary of Defense Donald Rumsfeld.

(JOINED IN PROGRESS)

DONALD H. RUMSFELD, U.S. SECRETARY OF DEFENSE: ... of the American people and how Americans over time -- and can and do overcome what might seem to be insurmountable difficulties.

Today, it may seem that there is nothing in the world of ours but bad news. Well, that's not the case. There's some encouraging news, as well.

The world today, according to Freedom House, is freer today than in any time in our history. America's armed forces are without question the best trained and the most professional fighting force in the history of the world.

Today, our country is working against the terrorists in more ways, with more countries than perhaps in any time in our history.

And I should add we're pleased to be able to say that our volunteer troops are enlisting and re-enlisting in our armed forces at encouraging rates.

Last week, I mentioned that active-duty recruiting numbers had exceeded their targets for the last six months. I could have also added that in the same period, the Army National Guard has recruited some 32,000 soldiers, which is its best performance in 13 years.

We're read about some colleges and law schools that have tried to forbid military recruiters from coming on campus, decisions that under the Supreme Court's recent decision could lead to the denial of federal dollars under the law.

But it's also important to note that many colleges and universities welcome recruiters and are proud of our veterans.

I'm told that the University of Illinois, for example, announced last month that it would offer 110 full master's of business administration scholarships to military veterans, worth about $74,000 each. What a wonderful demonstration of support for those folks who have stepped up and volunteered to help protect the American people and our free way of life.

Anyone who doubts our future need only think about those troops, their families and the millions of Americans who honor and support them. They are outposts of hope and a tribute to the American spirit that has not faltered and will not falter.

Next Monday, the 24th of April, the United States Navy ship Mercy, a hospital ship, will depart San Diego on a five-month humanitarian swing through the western Pacific and Southeast Asia.

This is a direct result of lessons learned last year during the tsunami relief operations, wherein the Navy medical team on board, the U.S. Department of Public Health folks on board, teamed up, as they will this year, with nongovernment organizations from around the world, doctors who had volunteered to assist. And they'll spend five months in the region, stopping first in the Philippines and then other countries that have asked for assistance, to provide medical attention -- dental, medical help -- for those ashore.

So we're looking forward to this one more opportunity for U.S. military teaming with others to be able to help folks in need.

QUESTION: Mr. Secretary, among the criticisms that have been made of you by several retired generals in recent days is that you've been dismissive and even contemptuous of the advice offered by senior military officers.

They've also said that, on a strategic level, they've faulted you for some failures in connection with the Iraq war, including failing to gain sufficient international support for the initial invasion, for example, on the northern front and for post-combat operations and stability operations.

Do you see validity in any of those criticisms? And is it appropriate for these to be aired publicly by retired generals?

RUMSFELD: Well, you know, I've been hearing about all of this, and I kind of would prefer to let a little time walk over it.

There are important issues that are involved. There's no question about that. Change is difficult. It also happens to be urgently necessary. Transforming this department is important.

I think that because of the importance of these matters that are being discussed, I'd like to reflect on them a bit. And I'm a little reluctant to start taking each piece of what people talk about -- or the individuals involved -- and I just am not inclined to be instantaneously judgmental about them.

Coming into work today, I did think about something that happened 30 years ago, I think close to this month. I was secretary of defense. And to my office about 7 o'clock at night came a decision where I was told that the Army was recommending an M-1 battle tank that had a 120-millimeter cannon, as I recall, instead of the 105 Howitzer that the Army traditionally had.

And the Army was in favor of the 105 and in favor of a diesel engine. And the other approach would have been to standardize with our NATO allies at 120 millimeters and also to move away from the diesel engine to a turbine engine.

I decided I wanted to take some time to think about it, and ultimately announced that I thought that the turbine engine and the 120-millimeter cannon was preferable to the 105 and the diesel engine.

Well, you would have thought the world had ended. The sky fell. Can you imagine? Can you imagine making that decision and breaking tradition for decades in this country? Can you imagine overturning what the service had proposed for a main battle tank? Well, it went on and on in the press, and it was a fire storm, and there were congressional hearings and people saying how amazingly irresponsible it was. And it calmed down eventually. The tank has done a great job and served our country very well these intervening decades.

And I mention it because the people involved were good people, and there were differences of views, and somebody needed to make a decision. And the person who is appointed by the president, who is elected by the people and then confirmed by the Senate as secretary of defense has to make those kinds of decisions.

And when you make a decision, you make a choice, somebody is not going to like it.

It's perfectly possible to come into this department and preside and not make choices, in which case people are not unhappy, until about five years later when they find you haven't done anything and the country isn't prepared.

Now, let me just take a minute and tell you what's going on in this last five years.

We have agreed with the Russians on dramatic reductions in strategic offensive nuclear weapons -- sizable reductions.

We have a new unified command plan for the Northern Command and the Strategic Command.

We have made changes in the defense logistics system.

We have provided reforms in NATO to create a NATO Response Force and to reduce substantially the number of headquarters that existed.

We have fashioned a senior-level review group where, for the first time, we really bring the military and the civilians, the services as well as the combatant commanders, into the decision-making process on all major issues in this department -- a different way of functioning.

The special operations forces have been dramatically increased and given new authorities. The Marines are now involved.

Every one of those changes that I just described has met resistance. It's taken years to get the Marines involved in the special forces. And people like things the way they are. And so, when you make a change like that, somebody is not going to like it.

We've had the largest base-closing effort I think in history. We've done two quadrennial defense reviews. We've adjusted our global posture around the world, bringing forces home from Europe and from Korea.

We have gone out to the combatant commanders who have the responsibility for war plans and had them revise and update their contingency plans, and shortened the process so that they wouldn't be on the shelf and be stale and be unusable and irrelevant.

We have passed a National Security Personnel System so that we can begin to get a grip on how we manage the Department of Defense and the civilian population, the workforce, which is so important. And it's tied up in the courts, and it'll take time. It's been three years I think that we've been struggling with it so far. And that's hard for people, that change. The idea of paying for performance is stunning for some people.

We've canceled weapons systems, just like we canceled the -- disagreed with the tank three years ago. The artillery piece, the so- called Crusader, was canceled, and it caused a major uproar. You may remember that. People didn't like it. Other pieces of equipment have been terminated.

The Army is going through what is a major modernization. It's moving from a division-oriented force to a modular brigade combat team force. When it's completed, it will be an enormous accomplishment.

And our Army will be vastly better than it was five to six years ago.

And that's hard. That's hard for the people in the Army to do. It's hard for people who are oriented one way to suddenly have to be oriented a different way.

If you think about the movement, we've gone from -- the military -- from service-centric war-fighting to deconfliction war-fighting to interoperability and now toward interdependence.

That's a hard thing to do, for services to recognize that they don't have to have all of the capabilities, but they have to work sufficiently with the others so that we truly get a leveraged capability and the taxpayers get better bang for their buck and the United States military becomes vastly more capable.

The idea of bringing a retired person out of retirement to serve as chief of staff for the Army was stunning and a lot of people didn't like it. The fact that he was a special forces officer, a joint officer added to the attitudes.

The idea of taking a Marine and making him supreme allied commander and another Marine in the Strategic Command, let alone a Marine as the chairman of the Joint Chiefs of Staff for the first time in history -- imagine what a stunning thing to do.

I look back on those decisions, and I'm proud of them. They caused a lot of ruffles, let there be no doubt. I mean, how man years ago -- it wasn't too many years ago that the Marines weren't even members of the Joint Chiefs, let alone the chairman.

PACE: The mid-'70s, yes, sir.

RUMSFELD: Mid-'70s.

QUESTION: Well, you got a good one there. RUMSFELD: So far.

(LAUGHTER)

Just a minute. Just a minute. I was asked a question, and I'm going to take all the time I want.

(LAUGHTER)

Now, all of this is to say that, at the same time, we had a war in Afghanistan, we've got a war in Iraq, and we've got the global war on terror going on.

Now, that's hard for people. That's difficult. With all of those moving parts, with all of those challenges to try to get from the 20th century, the industrial age, into the information age, to the 21st century, from conventional warfare into a regular and asymmetrical warfare is a difficult thing to do.

And, by golly, one ought not to be surprised that there are people who are uncomfortable about it and complaining about it.

It's also true that I have a sense of urgency. I get up every morning and worry about protecting the American people and seeing if we are doing everything humanly possible to see that we do the things that will make them safe.

And that means you have to look out six months and imagine that there was another 9/11 of equal proportion or twice or three times the proportion and ask yourself, what ought we to be doing today to avoid that from happening six months from now?

And that's what we're doing. And we're working hard at it.

I think that...

(CROSSTALK)

(LAUGHTER)

RUMSFELD: I think that it's important to put all of what is going on in context and recognize that people who are often talking about what's taking place inside here do not know what is taking place inside here.

I don't mean to say -- they knew when they were there, certainly. But I think it is important that we recognize that there is a lot of change going on. It's challenging for people; it's difficult for people. And we have to, I think, be reasonably tolerant with respect to things that get said.

QUESTION: Mr. Secretary, there's one thing you may want to comment on. I know you do not like to quote The Washington Post, one of your favorite newspapers, but there was an issue this morning I think you may want to touch on, if you haven't seen it, the lead editorial. And that is that it might be a bad precedent to have a secretary of defense, a civilian -- given the fact that you have civilian leadership (inaudible) because of criticism by military officers, active duty or retired.

And another brief point, have you considered perhaps or have you talked to the president in this firestorm where you are, as clearly the center of the controversy over Iraq, have you considered resigning to ease his burden and maybe to assist GOP people running for election or re-election in November?

RUMSFELD: With respect to the first, you asked if I'd like to comment on it.

I don't think so. I think I'd like to let the experts and historians talk about that question of civilian-military relationships, leave it to them.

And the president knows, as I know, that there are no indispensable men. "Graveyards of the world are filled with indispensable people," quote/unquote.

No. He knows that I serve at his pleasure, and that's that.

PACE: Let me say something, if I could, about the process. In fact, it's really important that our fellow citizens understand that the process of making decisions and all of the things that the secretary just talked about, as far as issues, all were handled basically in the same fundamental way, which was a great deal of dialogue amongst the people wearing uniforms and those wearing civilian clothes.

A normal day for me -- a minimum of 30 minutes a day. Today is much more of an example: three to four hours per day. Sometimes as many as six, seven or eight hours per day, the chairman and the vice chairman are with the secretary of defense, listening to all of the information that is being provided to him, giving our best military advice.

We are reaching out, either formally through a war plan staffing process or informally just through a discussion process to the combatant commanders and asking their opinions about whatever the issue of the day is.

And if it's important, the combatant commanders have either gotten on a video teleconference or they've come to this city and sat down with the secretary, and they've come (ph) in through the tank and been with the chiefs.

And the chiefs, individually, are with the secretary at least once a week, if not more often, in the meetings that he holds.

And then the additional meetings that have been formed during the course of the last several years, where all of the senior civilian leaders in the department and all of the senior military leaders in the department get together, not for an hour, but for two or three days at a time. It used to be the combatant commanders would come to town twice a year for two days. Now they come to town three times a year for three days to sit down for quality time, three whole days, with the senior leadership of the department, just discussing various issues.

There are multiple opportunities for all of us, whatever opinions we have, to put them on the table. And all the opinions are put on the table.

But at the end of the day, after we've given our best military advice, somebody has to make a decision. And when a decision's made by the secretary of defense, unless it's illegal or immoral, we go on about doing what we've been told to do.

RUMSFELD: Don't even suggest that.

(LAUGHTER)

Illegal or immoral.

PACE: But those are the reasons why you would expect somebody to -- after having had the proper opportunity to speak their mind -- I mean, it's important for the American people to understand how this dialogue takes place, that they understand that decisions are not made in a vacuum and that all of those of us who you trust with the lives of your sons and daughters -- you trust us -- that we are going to speak our minds as we should to the leadership so that they can make decisions based on as much knowledge as possible.

So we all have the same facts that lead us to different opinions potentially, that lead us to a dialogue that gets to the right solution.

QUESTION: The outpouring of criticism of you suggests that there's a great deal of dissatisfaction within the office with your leadership. So how can you lead the department effectively if that's the case? And what are you doing personally to address the concerns that they may have?

RUMSFELD: I don't know that that's the case. We've got, what, 6,000, 7,000 retired admirals and generals. Anyone who thinks that they're going to be unanimous on anything -- look at the votes in the House of Representatives. It's 51-49, 55-45. Same thing in the Senate. Look at our country when we vote.

There are always differences of opinion. That's a healthy thing in this country. We ought to respect it and get about our business.

But if it paralyzes people because someone doesn't agree with them, my goodness gracious, we wouldn't be able to do anything.

PACE: It would be unfair to leave that statement the way it is. It is not my experience that that's true.

General Hagee, commandant of the Marine Corps, just came back from I think it was a week in Iraq. He got exactly zero questions about the leadership in the department.

Last week, while all this was going on back here, guess what they're focused on out there? They're focused on their mission, getting the job done.

The sergeant major, my sergeant major, Sergeant Major Gainey just got back from the Gulf region himself, and he received no questions like that, even though did he a lot of probing.

The fact of the matter is that the folks who are out doing this nation's business are appreciative of the leadership that's being provided and understand the missions they have and the value of what they're doing.

QUESTION: ... you twice offered your resignation to President Bush, which he rejected, even though there was no evidence that the activities there worked its way up the chain of command, certainly to the Pentagon.

Yet here there are questions about decisions in which you were directly involved regarding the war in Iraq, and you said you don't even consider resignation.

Why in one case and not the other?

RUMSFELD: Oh, just call it idiosyncratic.

(LAUGHTER)

QUESTION: Mr. Secretary, how much of this do you think is simply about your management style?

In this Wall Street Journal opinion piece that was written yesterday by a number of retired generals, it was said that some feel that you have been unfair, arrogant and autocratic. And this was from your supporters...

(LAUGHTER)

... who were supporting you in this opinion piece.

How much do you think this is about your management style and...

RUMSFELD: No idea.

QUESTION: Well, quick follow-up. To the charge that you're arrogant and autocratic...

RUMSFELD: I've said I have no idea. QUESTION: Are you arrogant and autocratic?

(LAUGHTER)

RUMSFELD: You know me.

(LAUGHTER)

QUESTION: Could I change the subject for a minute?

RUMSFELD: It depends on where you want to go.

(LAUGHTER)

QUESTION: Afghanistan.

I was there last month, and it seems pretty clear that the poppy opium trade is taking over the economy, that it's already become a narco-economy. It's $2.8 billion in illicit drug trade compared to $4.6 billion GDP legitimately. And that that's having all kinds of effects in terms of funding the insurgency, wrecking chances for law and for legal stability, that it's driving farmers into the arms of the Taliban and that it's poisoning western Europe, Russia, the 'stans with cheap heroin.

Two questions: How concerned are you about that? And are we doing enough?

RUMSFELD: We are concerned. We have been from the beginning. It is something that the United Kingdom, under the Bonn process, had agreed to take the lead on.

With the establishment of the Karzai government and a parliament of their own, they have the responsibility for taking the lead. And the U.K. and a coalition of other countries are in support of that.

There's a good deal that's already being done. Obviously, you are correct: A great deal more needs to be done.

The pull of narcotics is powerful. And the money that comes from the narcotics trade is enormous. And it is a risk to Afghanistan. It's a risk that through corruption it could adversely affect the democratic process in that country.

I think that everyone's sensitive to that. The State Department is involved. The Department of Justice is involved. The DEA is involved. We're involved, the Department of Defense. And other coalition countries are working together to try to assist the Karzai government in dealing with it.

You have a very poor country, and, depending on the crop year, they can have a very big crop and have a large amount of revenue. And it is a serious problem that they are attending to and we need to assist them in attending to.

QUESTION: Mr. Secretary, or General Pace, as the focus has been on all this criticism of you, still, Iraq, there is no permanent government, no decision there. Some Sunni neighborhoods are now reporting increased violence and some Sunni lawmakers are saying it's the result of an unleashed militias backed by the government. They call it even ethnic cleansing.

Can you give us the latest on what your sense of the militias are in Iraq and perhaps the prognosis for the permanent government?

RUMSFELD: Pete?

PACE: Long term, the militias are going to need to come up underneath central government control. And I think that'll be an issue for the new government, when it forms, to determine with what speed they want to deal with that.

Second, with regard to Baghdad, for example, in coordination with the current government, eight additional battalions -- five of which were Iraqi battalions, three were U.S. -- were added to the security in Baghdad to help maintain calm there.

So the current leadership in the country, in cooperation with the coalition leadership, is making the right decisions now to handle the current security environment. And when the new government gets in place, there'll be fundamental decisions that government will have to make about how to assimilate those at arms into their overall security structure.

QUESTION: Mr. Secretary, are you encouraged by what's happening as far as the development of the new government?

RUMSFELD: Well, needless to say, as I've said before, it is a concern that they have not yet been able to come to agreement with respect to the new leadership of their government of that sovereign country under their new constitution.

On the other hand, they've had a lot of discussions. And everything I see publicly and privately at this stage indicates that the senior Kurdish and Sunni and Shia leadership all recognize the inadvisability of continuing without a government. And the calls that they are putting out to come to resolution of this are serious and repeated.

And I expect that we will see a government formed there in that country in the days ahead. And that my hope and prayer is -- and I know it's the hope and prayer of the people in that country -- that with a government that is inclusive, to be sure, but has also agreed to govern from the center to the benefit of all of the people that voted and every element in the country will have a salutory effect with respect to the insurgency. Time will tell. And we'll have to see.

QUESTION: You said bring the militias under control. Is that a new position? As opposed to disbanding the militias, to bring them under control of the government, is that a new... PACE: I hope what I said was that they will have to determine how to assimilate them. They will either have to assimilate them back into civilian society without weapons or into the police forces or the army with weapons. But that'll be up to their government to determine.

RUMSFELD: Thank you very much.

PHILLIPS: Defense Secretary Donald Rumsfeld side by side with the Chairman of the Joint Chiefs of Staff Peter Pace. Of course we were listening to see what type of response he would have with regard to all of these retired generals coming forward and criticizing the way Donald Rumsfeld has been handling his position, asking the president of the United States to force Rumsfeld out of that position. The president still coming back, saying he supports Donald Rumsfeld 100 percent.

What was interesting here is that Rumsfeld spent most of his time there at that briefing talking about the past five years, and talking about what he has done within those past five years, with regard to the creation of Northern Command. We saw Northern Command in full force during that response to Katrina and what happened on the Gulf Coast. It was the military working side by side with the DOD to step in and help in a natural disaster. He talked about defense logistics, NATO response force, special operations being increased, and also forces from Korea and Europe coming home and positioning troops in better places since he has been in that position.

He says that with all of these changes have met resistance, and that people like the way things are.

So it was interesting for the first time he really came forward talking for longer than five minutes about this criticism.

Now that Rumsfeld sits down with military analysts for a brainstorming session, that's what coming up next. We're not sure if it is that, or more damage control or a little bit of both. We can't take cameras in, but we are going to bring that you story later on LIVE FROM, and talk about the generals that are for Donald Rumsfeld and also against him.

The news keeps coming. We're going to keep bringing it to you. More LIVE FROM coming up next.

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